Jess and Julie Lyda

King County average home prices posted their first gains in three years. After three years of continued decline, King County home prices may have finally reached their bottom. December 2010 ended the year with a surprise jump in the number of homes sold, along with a rise in home prices. Many communities in King County posted year over year price gains, while other are still showing losses.

This reinforces the popular tag line "location, location, location".

When checking the individual communities on the City Charts on our blog:

www.snohomishcountymarketstatistics.blogspot.com

We see that several cities posted positive year over year price gains:

Bellevue
Kirkland
Redmond
Edmonds
Lake Forest Park
Woodinville

We track only north and east of Seattle communities, there may be gains in orther areas.

An increase in home prices doesn't necessarily mean homes have increased in value, but rather higher priced homes have been selling which brings up the overall average. This is important to keep in mind, as we still see downward pressure on home prices overall.

Rising inventories of distressed home sales and foreclosures will certainly keep the pressure on prices, but the tide could be changing. This is also a clear indication that prices are no longer "Falling off the cliff" and we are reacing a level of stabliization.

Certain ecohomic conditions play a role in our local home prices, so while we still have lackluster employment numbers, the market is most likely to remain flat until conditions improve.

Does that mean it is a good time to buy a home? If we take into consideration interest rates being at all time lows, it could be. There are many reasons people purchase homes. A place to live, an investment property, or a money maker.

For most home owners, buying a home was always a long term investment. That's what went wrong during the housing bubble. The days when one talked about paying off their mortgage so they could live rent free. Not irrational exuberance in sucking out equity to buy more things.

Homeowners make a community. They have long ther visions associated with their home. They get involved in community and neighborhood orgainizations. Communities with higher home ownership have better educational performance and lower crime rates.

Still, while financial advantages shouldn't be the first and only thing to consider when we think about owning a home, it would be foolish to discount these benefits althogether. The opportunity to take advantage of tax deductions for mortgage interest and property taxes or the ability to benefit from the capital-gains exclusion on the sale of a home up to $500,000.

So there are other factors to consider when deciding to purchase a home other than sales price. Interest rates, tax benefits, community benefits, and the emotional benefits.

So is the market finally reaching a bottom? We will only be able to tell when we see price increases over a longer period of time. However, we see the market is opening up some great buying opportunities for some who are taking advantage of them now.

If you're ready to find a home give us a call!

Jess and Julie Lyda
RE/MAX Northwest Realtors
425-487-3001

The foreclosure rates for Snohomish County dropped in November 2010. Default notices dropped significantly. The question is whether this is just a holiday seasonal slowdown or if this indicates that the worst is over. Only time will tell.

The Snohomish County foreclosure rates remain elevated for July 2010. The Notice of Trustee Sales remain near their highest levels for the year. As typical, only about 25% of the Notice of Trustee Sales turn into actual foreclosures. There are various reasons why a home won't be foreclosed on. Those could be homeowners who have entered into a loan modification, those that catch up on their late payments, and those that end up selling their home.

The Snohomish County foreclosure rates show us that homeowners are still struggling to meet their mortgage payments. However, what is most interesting is that the numbers show us that the banks are not aggressively foreclosing. We hope this is a result of banks working with homeowners on loan modifications through the government's Making Home Affordable Plan.

With the HAMP program there is really no need for someone to lose their home through foreclosure. This program not only helps those that have had income reductions, it will help those that have had a job loss.

"By August 1, all mortgage servicers participating in the Making Home Affordable Program will offer extra help for homeowners struggling to make their monthly mortgage payments because of unemployment. The Unemployment Program will offer homeowner's a forbearance period to temporarily reduce or suspend their monthly mortgage payments while they seek re-employment"

If you know of someone who is struggling to meet their payments, have them give us a call. We would be more than happy to explain the Making Home Affordable Program and how it may help them stay in their home. We have already helped 2 families keep their homes after going through a home loan modification.

As Realtors, we find it is important to provide education to those in need - and we are here to help!

The Snohomish County foreclosure rates show us that homeowners are still struggling to meet their mortgage payments. However, what is most interesting is that the numbers show us that the banks are not aggressively foreclosing. We hope this is a result of banks working with homeowners on loan modifications through the government's Making Home Affordable Plan.

With the HAMP program there is really no need for someone to loose their home through foreclosure. This program not only helps those that have had income reductions, it will help those that have had a job loss.

"By August 1, all mortgage servicers participating in the Making Home Affordable Program will offer extra help for homeowners struggling to make their monthly mortgage payments because of unemployment. The Unemployment Program will offer homeowner's a forbearance period to temporarily reduce or suspend their monthly mortgage payments while they seek re-employment"

If you know of someone who is struggling to meet their payments, have them give us a call. We would be more than happy to explain the Making Home Affordable Program and how it may help them stay in their home. We have already helped 2 families keep their homes after going through a home loan modification.

As Realtors, we find it is important to provide education to those in need - and we are here to help!

Most of us all know about the 2 most common home ownership tax deductions available.

· Home Mortgage Interest
· Real Estate Taxes

But did you know that there are 3 MORE VERY IMPORTANT ADDITIONAL tax deductible items that are usually overlooked?

These are 3 important deductions that every homebuyer needs to know!

1. Points Paid By Seller (for borrower):

You say what? How could dollars contributed by the Seller (which shows up on the Seller side of the HUD statement) be a tax deduction for the buyer?

Well according to the IRS, their position is this:

"A borrower is treated as paying any points that a home seller pays for the borrower's mortgage"

The term "points" is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points also may be called loan origination fees, maximum loan charges, loan discount, or discount points.

If you purchased a home and the seller paid "points", these are fully deductible to you as the homebuyer! They are not deductible to the home seller.

Important Exception: The points were not paid in place of amounts that ordinarily are stated separately on the settlement statement, such as appraisal fees, inspection fees, title fees, attorney fees, and property taxes. Also, the deduction cannot exceed the amount of money you used as down payment, earnest money or other contribution totals.

Tip: Make sure your lender/escrow doesn't apply the seller paid points directly to charges such as appraisal fees, credit reports, document preparation fees, etc. The amount is clearly shown on the settlement statement (such as the Uniform Settlement Statement, Form HUD-1) as points charged for the mortgage. The points may be shown as paid from either your funds or the seller's.

2. Mortgage Insurance Premiums: New IRS Effective Rule January 1, 2007

You can take an itemized deduction on Schedule A (Form 1040), line 13, for premiums you pay or accrue during 2009 for qualified mortgage insurance in connection with home acquisition debt on your qualified home.

Those that had to pay an up front Mortgage Insurance Premium at closing are allowed to claim that amount as a deduction.

Important Exception: If your adjusted gross income (AGI) on Form 1040, line 38, is more than $100,000 ($50,000 if your filing status is married filing separately), the amount of your mortgage insurance premiums that are deductible is reduced and may be eliminated. See Line 13 in the instructions for Schedule A (Form 1040) and complete the Qualified Mortgage Insurance Premiums Deduction Worksheet to figure the amount you can deduct. If your AGI is more than $109,000 ($54,500 if married filing separately), you cannot deduct your mortgage insurance premiums.

Tip: Don't forget to deduct the mortgage insurance premium included in your mortgage payment every month at the end of the year as well, and for the years to come.

3. Late Charges on Mortgage Payments:

You can deduct as home mortgage interest a late payment charge if it was not for a specific service in connection with your mortgage loan.

Advice: Please consult your tax accountant for advice regarding restrictions and limitations for your personal situation.

For more information on Home owner/buyer tax deductions go to:
http://www.irs.gov/publications/p530/index.html